How health insurance can save you money
Insurance is one of those things you hope you’ll never need to use, but if you do need it, you absolutely want to have it
There is a glut of information out there on health insurance and right now you’re probably wondering if you really need it when you’ve got so many other essentials to pay for. The good news is that funds like ahm are all about making this easier and more straightforward. And having health insurance can actually save you stacks of cash and today, we want to explain exactly how.
Let’s get into it.
The first way we can save money by having private health insurance is related to the Medicare levy surcharge.
When we pay our taxes at the end of every financial year, we also pay the Medicare levy which is 2% of our taxable income. This helps fund the public system.
However, if you earn over a certain amount ($90,000 for singles or $180,000 for couples) and you don’t have private health insurance, then you’ll have to pay the Medicare levy surcharge, which is a surcharge of 1%, 1.25% or 1.5% depending on things like your taxable income and any fringe benefits you may receive.
Why is there this surcharge when life is already so expensive? Well it was put in place to encourage Aussies to use private health care to lighten the load on the public system.
With this in mind, if you’re looking to save some cash, are earning $90k+ and want to avoid this additional surcharge, it could be a good money saving option for you to take out private health insurance.
Another initiative that encourages us to take out private health insurance when we’re younger is lifetime healthcare cover loading. If you don’t have private hospital cover set up before or in the year of you turning 31, but you do then get hospital cover later on in life, you’ll be made to pay a 2% LHC loading on top of your premium for each year that you didn’t have hospital cover after the age of 30.
If you do want to avoid this loading, it’s a good idea to really consider private hospital cover before you reach that 31-year-old milestone!
If you’re wanting to avoid the Medicare levy surcharge and avoid LHC loading, there are great discounts available for young people to encourage us to get insured. If you’re aged between 18 and 29 you could receive up to 10% off your private health insurance hospital premiums and the best part is, that discount is valid until you’re 41.
Finally, there are of course other, more exciting ways of having health insurance that can save you money. For example, if you were to choose health insurance with ahm you could also receive discounts on your glasses from places like Specsavers and OPSM, plus you could get a discount on your gym memberships to places like Goodlife Health Clubs.
Of course, having health insurance also means you can access things like physio, dental, chiro, myo and plenty more without having to pay the full fee so if you’re someone who frequents those services that aren’t covered or subsidised by Medicare, then it could pay to invest in insurance and save yourself some coin.
Keen to start reaping these rewards and saving some cash by utilising private health insurance?
Check out the team at ahm Health Insurance who have an incredible website that takes a lot of the overwhelm out of insurance by breaking seemingly difficult subjects down in a really digestible way. AND they put together a really helpful cheat sheet to help you make sure you’re making the most of your extras cover, head here to read it!